Christmas comes early for many US associates
It’s the most wonderful time of the year for US associates. Those US firms that announce partnership promotions ahead of the new financial year have made a swathe of new partners very happy – and considerably better off.
First off the block were Latham & Watkins and Cleary Gottlieb Steen & Hamilton, increasing partner numbers by 6 per cent and 8 per cent respectively. Unsurprisingly, both firms made up the most amount of partners in their New York offices, where they have the biggest headcounts. Proskauer Rose made 17 promotions across its New York, Boston and Los Angeles offices.
Kirkland & Ellis was the most generous in its promotions, making up 64 associates worldwide and increasing its partnership by 13 per cent in the process.
Perhaps the luckiest of all were the four associates promoted to Cravath Swaine & Moore’s partnership. The last financial year was a record one for Cravath and its partners now enjoy an average profit per equity partner of $2.7m (£1.5m), making them the second most profitable lawyers in the US after those two streets away at Wachtell Lipton Rosen & Katz.
Sullivan & Cromwell, Simpson Thacher & Bartlett, Wilson Sonsini Goodrich & Rosati and Ropes & Gray are also among the firms to choose early promotions. It is understood that Mayer Brown Rowe & Maw, Shearman & Sterling and Weil Gotshal & Manges will also make up partners before the end of the year.
Influx of public prosecutors continues
Former public officials and prosecutors continue to be hired into private practice, with Latham & Watkins netting the most high profile of the recent trawl.
Latham’s Chicago office welcomed the former lead prosecutor in the Enron scandal Sean Berkowitz, who joins the firm as a litigation partner. Berkowitz’s arrival came just one week after Enron chief executive officer Jeffrey Skilling was sentenced to 24 years in prison for insider trading and fraud.
Latham fought off tough competition to land Berkowitz. Chicago stalwart Kirkland was enthusiastic, as was Paul Hastings Janofsky & Walker, which reportedly wanted him to launch its new Chicago office.
Berkowitz follows other former Enron prosecutors who have joined private practice, including his task force predecessors Leslie Caldwell and Andrew Weissman, who went to Morgan Lewis & Bockius and Jenner & Block respectively.
Meanwhile, the cross-fertilisation between public office and law firms was heightened by Bracewell & Giuliani name partner and former New York mayor Rudy Giuliani finally making the first move to becoming the next US president. On 10 November Giuliani filed papers to create the Rudy Giuliani Presidential Exploratory Committee. Committees are a way for presidential hopefuls to gauge support across the country before officially deciding to run.
Greenberg distances itself from scandals
Politics is what 1,334-lawyer behemoth Greenberg Traurig is all about. But in the past month it has been trying to distance itself from events on Capitol Hill.
Former Greenberg partner and disgraced lobbyist Jack Abramoff began his six-year prison sentence for fraud on 15 November. If this was not bad enough, the next day news broke that former head of tax Jay Gordon had been disbarred in New York after admitting to taking kickbacks and to fraudulent billing.
Olswang‘s US ally has distanced itself from both men, who left the firm in separate instances in 2004. Of Gordon, firm president and chief executive Cesar Alvarez said in a statement that the incident was “a regrettable and isolated situation”, adding: “We had zero tolerance for this lawyer’s ethical lapse.” In total Gordon admitted to taking more than $1.2m (£640,000) in kickbacks between 1999 and 2004. He would recommend wealthy clients, including the head of New York’s Metropolitan Transportation Authority (MTA), to questionable tax shelters in return for referral fees from these shelters’ sponsors. One, Distressed Assets Corporation, deposited $600,000 (£315,000) of referral fees in a Greenberg account. Gordon then fraudulently billed more than 1,000 hours to explain away the money.
It was only when MTA head Peter Kalikow had one of these tax shelters disallowed by the Internal Revenue Service and complained to Greenberg that Gordon’s ruse was uncovered following a firm investigation. The inquiry discovered that, unbeknown to Kalikow, tax shelter Fortrend International paid Gordon $292,000 (£153,000) as a referral fee for Kalikow’s custom.
Mega-buyout sends US firms radio gaga
Despite investigations by the Department of Justice, private equity funds showed no let-up in activity. The latest mega-buyout, for $26.7bn (£14.03bn), was backed by Thomas H Lee Partners and Bain Capital. The funds bought out Clear Channel, the US’s largest radio operator, and created roles for at least seven top firms.
Akin Gump Strauss Hauer & Feld and Sidley Austin advised Clear Channel and its special committee respectively, then Boston-based firm Ropes & Gray and 150-lawyer Dow Lohnes won instructions from the private equity houses.
Sullivan scored a role by advising Goldman Sachs, financial adviser to Clear Channel, and the consortium of banks that provided financial commitments to Bain and Thomas H Lee Partners was represented by Wall Street stalwarts Wachtell and Cahill Gordon & Reindel.
Bingham chooses Hong Kong base for China push
US firms have long been playing out their rivalries in Hong Kong and China. Bingham McCutchen finally decided to take the plunge and open up a three-lawyer office in Hong Kong on 1 January. London-based finance partner Kate Walters will be heading out to spearhead the opening, overseen from London by UK managing partner James Roome.
The firm already has a small presence in Japan but draws the line at mainland China, given that its Asia offering will be mainly acting for distressed debt and hedge funds rather than corporate clients, much like its London office.